Local Interactive Strategies

Coaching news startups has been a very rewarding part of my recent professional life, including two rounds of a program called “Grow & Strengthen” at the Center for Cooperative Media at Montclair (NJ) State University, a vital hub in the NJ news ecosystem. This is a very cool multimedia package reflecting on what we’ve all learned in the past two years. Some of the writing is mine, but I take no credit for the excellent presentation by Joe Amditis and Debbie Galant.

The first piece posits that daily newspapers are crucial to an engaged and informed citizenry. This is a theme we’ve seen frequently in the recent years. No argument there, but the premise goes further to try making a cause-effect connection between daily newspapers’ decline and a decline in civic engagement, which sure seems like it could be a case of a correlation, not a causation. (I would point out that these pieces are usually written by daily newspaper reporters and assigned by daily newspaper editors. This isn’t some kind of conspiracy – let’s acknowledge that the work they do is important. ).

And then it cites New Orleans, where the daily paper went less-than-daily. But it points out that The Lens has been picking up some of the journalistic slack in New Orleans, though it doesn’t mention the fact that local civic and business leaders have stepped forward to beef up The Lens. Contrary to the CSM headline, it sure looks like a city’s civic engagement can survive the economic troubles of an individual paper.

The Street Fight piece represents the other kind of hand-wringing, basically “Sure, journalism is springing up in local communities, but is it economically viable?” (A timeworn theme of those at the national level covering trends in local news.) And this piece offers examples of strong civic engagement supported by independent news outlets. So that’s the other bookend that doesn’t make sense in light of the first. CSM worries that civic engagement is dying because of dying newspapers. SF worries that there’s plenty of civic engagement but who’s gonna pay for it.

The most likely reality is this: Civic engagement ebbs and flows for many reasons. (See “Bowling Alone” by Robert Putnam). Historically, not everybody has been engaged, and not everybody will. Journalism plays a role of both the cause and effect of local civic engagement – not always for the better. Daily newspapers in the 1990s actually began recognizing how they undermined civic engagement by their coverage practices, like focusing on problems, not solutions, or simply covering last night’s meeting decisions – both of which made citizens feel powerless. Taken that way, the existence of a daily newspaper wan’t entirely a positive driver of civic engagement.

Looking forward, I expect civic engagement will continue to have its own life of ups and downs; traditional and startup journalists will continue to enhance, undermine, or simply follow those ups and downs; and citizens at the high end of engagement will find ways to support journalism’s role.

The news that MinnPost posted a second year in the black is important not just for MinnPost, but also for nonprofit independent news sites in general.

Significantly, MinnPost CEO Joel Kramer told Nieman Journalism Lab that he expects MinnPost’s revenue from foundations to continue to shrink. MinnPost, seen as a model by many local sites going the non-profit route, holds an important lesson for nonprofit journalists: use grants like venture capital, not as sustaining revenue. “We’re happy to get all the foundation support we can get, but our long-term goal from the time we launched was to become steadily less dependent on foundations,” Kramer told Nieman.

This bears repeating: Nonprofit isn’t a business model – it’s a tax status. If you’re considering starting a local news site, don’t expect foundation money to sustain you, assuming you can find some. Foundations are starting to treat this funding more like startup capital, and they’ll want to see your sustainable business plan.

Kramer makes another important point, something that too many local sites miss: valuing loyal local usership vs valuing big numbers. MinnPost puts a priority on counting how many users visit at least twice a month, and how many are from Minnesota. “Our advertisers and sponsors, what they’re interested in is communicating with Minnesotans. Also, our donor base overwhelmingly comes from Minnesota,” Kramer told Nieman. “So we actually believe, strategically, that a visit by a Minnesotan, a pageview from a Minnesotan, is worth far more than us than a visit or a pageview from elsewhere.”

I’ll admit I was concerned by the buzz when MinnPost first launched, and its foundation support was being held up as a replicable model for sustaining independent local journalism in the U.S. There just isn’t enough foundation money to make that happen. Fortunately, MinnPost is turning into a replicable model of diversified revenue streams, with a focus on accountability and locality.

Quickbooks owner Intuit posted an infographic that could be useful to local indie publishers on a couple of levels. First, it’s good stuff to share with your customers – most of whom are probably small businesses. They can see where they stand in comparison to their peers in digital marketing, probably not research they’re doing on their own.

Second, it reveals some opportunities that could become part of your offerings, for example helping update their social media and websites. The graphic shows that most businesses feel positively about social media and generally OK with their existing websites. But their frequency of updating ranges from pretty good, to poor.

Ask your advertisers if they need help with posting to their websites and/or Facebook. If there’s a decent response, consider making it part of your offerings. You probably can price this work reasonably yet profitably. Not only will this service create a tighter relationship with the customer, but it also diversifies your revenue stream.

One assumption is that innovative projects were derailed by a steady decline of newspapers’ revenue, especially the downturn of 2008. This is true on some level, but one big message in Clayton Christensen’s “The Innovator’s Dilemma” (on which N2 was based) is that internal disruptive innovation will always be derailed when the core business runs into trouble.

If Christensen were the snarky type, his response to Newspaper Next’s results might be “I told you so.” Few, if any, newspapers created separate divisions, as recommended by Newspaper Next. Because newspapers insisted on keeping their “innovators” within the core business, the innovations were predictably doomed. As Christensen found, it’s too easy to shut down a low-profit (or no-profit) initiative when times get tough, and it’s too hard politically to keep a skunkworks going when the core business is laying off employees. The companies that beat the dilemma (like 3M, one of Christensen’s examples) are ones that insulate their innovative startups from the fortunes of the mature business.

Another assumption I question is that newspapers really wanted to innovate in the ways Christensen recommended. Christensen describes two kinds of technology: “disruptive technology” and “sustaining technology.” For example, online distribution of newspaper content is a sustaining technology – it extends the usefulness and value of a current product. Craigslist is a disruptive technology – something that upends the current model, typically starting small and under the radar, and then catches on. Early in their development, disruptive innovations often are pooh-poohed by those in the core business as unprofitable, low quality, unworthy of attention. That was the newspaper industry’s early response to Craigslist.

So the article asks, “Did Newspaper Next succeed in transforming newspapers?” Sadly, the answer is No.

I ‘ve been advocating using Facebook’s comments system on public sites for a while (I didn’t realize how long – 2+ years?? ). It’s been surprising that so few publishers (both traditional and startup) have stuck with the usual systems. Mostly the argument seems to come down to either (1) we want to own our own system, not use someone else’s or (2) anonymous comments are an important part of the dialog.

Now the LA Times has done an A-B experiment, running the same story with two commenting approaches: Facebook Comments and the paper’s existing commenting system. Poynter examines the outcomes.

I see two very important takeaways: First, Facebook isn’t just a powerful technology, it’s a powerful viral marketing system. LA Times has seen significant increases in engagement (measured in traffic) in the Facebook experiment. Second, it reduces vitriol in comments not just because people’s names are attached, but because the comment shows up on your Facebook wall! I believe the latter point is key. It’s one thing to make some idiotic comment on a site where a friend may or may not see it. It’s something else when that idiotic comment is broadcast to all 899 of your friends.

In the past couple of years as Facebook has become embedded in the culture, there’s an even bigger reason to use Facebook if you’re a publisher. Remember Willie Sutton’s response when asked why he robbed banks: “Because that’s where the money is.” Why use Facebook? Because that’s where your audience is.

Recent coverage of – and commentary about – hyperlocal news has been falling into two perspectives: (1) There’s not enough money in it to sustain the business at a local level (UK’s Guardian Local closing) or (2) AOL’s Patch points the way to a national/local hybrid.

In both cases, the assumption is that local coverage requires an approach that carries tremendous overhead cost: a traditional newsroom approach to assigning, editing and delivering news.

But far under the radar of media watchers, there is a ton of local coverage being done piece by piece, primarily by a solo journalist covering a town, city or neighborhood. While this piece-by-piece coverage may not look significant enough to the pundits, it’s real and it has impact. Unfortunately, that piece-by-piece nature also means it’s barely sustainable because each site’s traffic isn’t enough to support a professional sales effort.

I’ve been getting a close-up look at this world for the past few months, working with a group of independent news sites in Chicago to figure out a sustainable business (a project supported by the Chicago Community Trust). These solo publishers are passionate about local news, and they wouldn’t need all that much revenue to keep going. They’re using free or cheap technology, lots of volunteers and their own energy to serve and grow local, loyal audiences. In many cases, their revenue is zero or close to it. So when these publishers talk about revenue opportunities, it’s a “glass half full” discussion. Contrast that with a traditional media company (like the Guardian) where any new initiative has to hit high revenue benchmarks to even look interesting.

That doesn’t make the business challenge any less daunting for independent sites. Building a sustainable business around local news takes resources and revenue to support them, which probably means some kind of group effort. But it doesn’t take the revenue that a traditional media business expects.

Remember, we’re in early times of local journalism’s reformation. There’s plenty of creative destruction in the works and still to come. A “hyperlocal” movement is under way, and it’s happening regardless of whether traditional media companies manage to make a business out of it.

Her main points are that successful startup journalism enterprises are happening, they’re experimenting with different economic models, and there are plenty of lessons being learned. You hear about a lot of the failures, but not much about the successes, which tend to be smaller, and local.

McLellan hits a theme doesn’t get nearly enough attention: startup journalists need to think like publishers, not as just journalists.

Ask Tom O’Malia, professor of clinical entrepreneurship at the USC Marshall School of Business, what he sees in journalists who arrive at Knight Digital Media Center’s News Entrepreneur Boot Camp to learn how to start a new site. O’Malia responds: “They have not yet recognized the difference between what they do, the product, and the value – the benefit – of what they do.”

The first, the product – what we have always called journalism – is what we have been spoiled into believing it is a public good so compelling that people are bound to open their wallets for it despite abundant evidence to the contrary. The latter – discovering and providing what customers value – is the challenging path to actually making money in news.

The thing is: making money in news isn’t a necessary evil. It’s an important measure of accountability. Is your news site (or newspaper, for that matter) relevant to the local community? Do local people use it? Do they count on it? If so, your journalism can support itself through advertising and other revenue streams. Selling advertising (or seminars, or t-shirts) is the clearest feedback loop you can have for a news site – unless and until you can really make a subscription model work. Even then, you’ll still need more revenue streams.

I’ve said this before, but it bears repeating: there’s more to a local community than traditional news. If a startup local online publisher wants to be successful, he/she needs to understand what makes the community tick, needs to understand the role of commercial content (yup, advertising) in the community’s interactions and vibrancy, and then needs to figure out where a new site fits among those interactions.

The money quote: “I don’t use my blog anymore. All the people I’m trying to reach are on Facebook.”

Not to wax nostalgic, but this took me back to the ’90s, when lots of us in media were trying to figure out “user generated content” (what a term!) – or more specifically, how to persuade those users into generating that content for us. Seriously, we thought it would be a win-win, not media taking advantage of users.

Didn’t matter. Those users are a slippery bunch, and they wouldn’t play along.

The most interesting group was teenagers. They were the first ones to build their own websites to show off their art, or music, or their programming skills. They used flashy HTML tricks, like blinking text. So we tried making a contest for them to show off their websites. They weren’t interested. Then we discovered they weren’t even building websites anymore. They had blogs.

More recently working on ConcertRat.com, I went looking around the web for how young people are talking about music. I found lots and lots of dormant blogs, each with a link to the user’s Facebook page.

It makes sense for a whole lot of reasons: it’s easy, it’s interactive, it’s immediate, and like the guy said, “All the people I’m trying to reach are on Facebook.”

Still, there’s a pattern here. You have to admit Facebook has a pretty solid hold on everyone’s attention these days, but still, what will be the next thing that kids move to, after Facebook?

So in a blog post today, Matt Cutts, Principal Engineer at Google, says Google is cracking down on content farms whose sole purpose is getting high ranks in search results, thus generating clicks, and thus click-throughs on ads.

We hear the feedback from the web loud and clear: people are asking for even stronger action on content farms and sites that consist primarily of spammy or low-quality content. We take pride in Google search and strive to make each and every search perfect.

Makes sense to me. Google’s only asset is the quality of its search results. As long as Google delivers me search results that answer my questions, I’ll come back. Why would I bother trying some other search engine?

Google has always seemed to be working hard to anticipate what I’m looking for, versus what someone’s trying to shove in front of me.

For instance, I just now Googled “restaurant” and yeah, OK, there’s restaurant.com, and the Wikipedia entry for “restaurant,” but most of the page displays restaurants around my current location. Google understands that when I search “restaurant,” I’m probably not asking how to start a restaurant, or what a restaurant is, or who makes the best restaurant equipment.

Point being, Google’s priority is delivering results that the user values – that’s basically Google’s definition of “quality.” If anything starts diluting that quality, according to Google, they’ll push back. And “webspam” is diluting the quality of search results. Cutts writes:

The obvious implication is that these content farms could have a brief lifespan. They exist only because of Google’s search algorithms, and Google can change those algorithms anytime.

The second implication is that Google is paying attention to tactics that drive results higher than their “natural” ranking. That’s called “search engine optimization” – but it’s a very broad topic. At one extreme, it simply means avoiding things that will keep your site unnaturally low in Google rankings. Examples include not assigning unique URLs to every page, not using unique titles for each page, not putting relevant terms in titles and headlines.

At the other extreme is what I consider aggressive SEO: figuring out some secret sauce that gets your site into a high rank that makes no sense to the casual observer. Try this. Google “Maine real estate.” I offer this example because I’m familiar with the architecture of the sites under the MaineToday brand (where I worked until 2008). You’ll see those sites in the first page of Google results (Numbers 3 and 4 – sweet!) . They have home listings from all over Maine, so logically, they should be ranked high on a search for “Maine real estate.” But check out the other sites on your first page of Google results. On this day, I’m seeing three sites that have only a few listings for a couple of very small areas of Maine, and another that’s nothing but a set of links to other sites. So out of 10 search results on the first page, 40 percent are not very useful for someone generally looking to buy a home in Maine.

About Local Interactive Strategies

Local Interactive Strategies consultancy helps turn interactive media into a business – a challenge facing both legacy media companies and entrepreneurial startups.

Often local media companies are hobbled by:

Too many ideas

Not enough action

Too much unfocused action

Competing priorities

Lack of data about best practices

Organizational misalignment

Local news startups often face:

Limited resources

Limited business background

Little knowledge about advertiser needs

Few contacts among similarly focused efforts

The solutions for legacy media and startups are obviously quite different. In the case of existing media, the solutions often involve clarity of vision, organizational alignment, some training and coaching. For startups, it might take some basic training, business planning, network-building and product focus.

This blog is intended raise up those topics, share ideas and hopefully provoke some discussion — whether here or in your organization.

It’s written from the perspective of those in leadership positions in local media whether publishers, newspaper editors or startup solo journalists. The idea is to share information and ideas that are actionable right now, with not a lot of blue-skying.

Local Interactive Strategies LLC is headed by Joe Michaud (more about Joe) and is part of a network of experts in recruiting, design, technology, multimedia journalism, product development and sales training.